Woah,
RBI’s relentless Dollar purchase has led the forex reserves to go up by $100 billion. As a result of which the USA has put India back on its so-called ‘currency-manipulators’ list. With the ‘tag’ back on, the rupee might have a chance to appreciate as RBI will likely step back from its dollar purchase.
⚔️ China-Australia Trade War
We are getting the highest prices we’ve ever had thanks to China.
-David Harris, CEO of South Australian Wine Group
🍷 There is no secret that Australia is well known for its wine and beer, and China has drunk them out of house and home. USD 850 million/AUD 1.17 billion of Australian wine aka 39% of the total value of wine was exported to China. Apart from wine, China provides an export-market with a valuation of USD 111 billion/AUD 153 billion.
But things went haywire this year. China is retaliating to Australia’s moves and statements 🗣️ concerning the ‘latest-generation 5G mobile phone networks and China’s role in coronavirus.’ In May, China slapped Australian barley with import duties. It then ✋ halted beef imports and timber imports. The sugar and seafood industry was slapped with whopping duties. These industries employ thousands of Australians and run their households. Should the Aussies take a step back?
China is taking a step forward. It imposed a giant 212.1% export duty on Australian wine. 🙉 This literally makes Australian wine unsellable in China. Moreover, this tariff was officially levied as a retaliatory tariff against Australian wine dumping. But according to China’s foreign ministry, Australia has been violating norms governing international relations and made erroneous words and deeds on issues concerning China’s core interests.
🐎 A one-trick pony export-wise to China. The Chinese market is rather important as the country is recovering from the coronavirus. But the USA, European Nations, and other big economies are still struggling with anti-disease controls which reduce the demand.
The click! No measures on Iron Ore imports. 🏗️ The steel industry of China is structurally dependent on Australian iron for normal operations. The entire ecosystem depends on the steel industry. Messing with iron ore imports would be ‘mutually assured destruction’ for China. Hence, Beijing has targeted only those Australian industries which are highly dependent on Chinese imports.
😱 The Fear Tax. A direct result of the Chinese tariffs is the increase in Iron Ore prices. The fear that China may consider imposing duties on iron ore has resulted in markets “nervously bidding up prices”.
This will help reduce the budget deficit and even out the whopping Chinese tariffs.
👇Ah, And Also This
🌾 Tug of War – The Wheat Monopoly. In 2017, Russia successfully took over the USA to become one of the largest wheat exporters. However, on Dec 15, the Russian Government announced a tax imposition on wheat exports to steady the domestic wheat prices. According to this measure, grains’ exports will be limited to 17.5 million tonnes between Feb 15 to Jun 30, 2021. A tax of 25 euros/tonne ($30.32/tonne) will also be in place during the same period. The imposition of tax on the wheat exports might shift the demands back to the USA.
👨🌾 Trudeau’s Carbon Tax. Canada has set a goal to become a carbon-free nation by 2050. A so-called ‘carbon-tax’ is already in place at $30 per tonne. And it would be increased by $15 a tonne each year starting in 2023. And with the newly announced tax, it will reach $170 per tonne by 2030. Now grain farmers require high amounts of energy, natural gas, and energy to dry their grain. And this carbon-tax will cost them $60 million. To make matters worse. The new tax will triple that amount.
🧃 Sugar Tax Rush – Crazy Tax Story
No. America is not the largest consumer of Coca-Cola. It is Mexico! A survey from 2012 found out that Mexico consumed 745 8-ounce servings of full-sugar Coke per person each year. Compare it with a paltry 403 servings in the USA, eh? Mexico has a history of gulping down carbonated drinks and anything else that is sweet including 🍫 chocolates, confectionery products, puddings, ice cream, and popsicles. More than 14 million of them suffered from diabetes.
So. The lawmakers had to devise a plan to watchdog the eating habits 🍽️ of their fellow Mexicans. On January 1st, 2014, they imposed an excise tax of 1 peso per liter of any beverage with added sugar, around a 10% tax. They also rolled out an 8% tax on non-essential foods that contain a lot of sodium, added sugars, or solid fats, including chocolates, confectionery products, puddings, ice cream, and popsicles.
📈 The results were OFF THE CHARTS. The purchases declined by 18.8ml per person per day in 2014 and 29.3ml in 2015 in the poorest of households. Overall, the sugary drink sales fell by 5.5% in 2014 compared with the previous year, and by 9.7% in 2015 compared with 2013. There was also some evidence that sales of bottled still water had increased slightly. Also, purchases of other untaxed drinks – including water – went up on average by 2% over the two years.
The World watched.👀 Mexico’s precedent was followed by Chile, Barbados, and Berkeley, California by 2015, and Mauritius and Belgium by 2016. In 2017, Portugal and Catalonia, United Arab Emirates, Saudi Arabia, Brunei, and Thailand introduced their own versions, followed by South Africa, and the UK in 2018.
The Sugar tax seemed to have worked and affected thousands!
💭 Byte of the Day
